March 18, 2015

Warren, Courtney Introduce Bank on Students Emergency Loan Refinancing Act to Tackle Student Debt

Nearly a Million More Borrowers Are Falling Behind On Their Student Loans

Washington, DC – Today, United States Senator Elizabeth Warren and Congressman Joe Courtney (CT-2) introduced the Bank on Students Emergency Loan Refinancing Act in the Senate and House. The legislation would allow those with outstanding student loan debt to refinance at the interest rates that were approved last year for new borrowers. A previous version of the bill was voted on in the 113th Congress, and every Senate Democrat and three Senate Republicans voted to move the bill forward, falling just short of breaking a Republican filibuster. 

Many borrowers with outstanding student loans have interest rates of nearly 7 percent or higher for undergraduate loans, while students who took out loans in the 2013-2014 school year pay a rate of 3.86 percent under the Bipartisan Student Loan Certainty Act passed by Congress in 2013. The Bank on Students Emergency Loan Refinancing Act would allow our students and young people to pay back their outstanding loans at the same rates that Democrats and Republicans in the House and Senate embraced last Congress as the appropriate rates for new borrowers. Nearly a million more borrowers are falling behind on their student loans compared to this time last year. 

“Since last year, nearly a million more borrowers have fallen behind on their student loan payments,” said Senator Warren. “Young people who are working hard to build a future deserve a real opportunity to succeed, and that means letting struggling borrowers refinance their student loans to take advantage of lower interest rates – the same way people refinance a mortgage, a car loan, or business debt. The Bank on Students Emergency Loan Refinancing Act would give much-needed relief to millions of borrowers, help boost our economy, and strengthen America’s middle class.”

“A college education is one of the most valuable investments a family can make, but rising costs have made it difficult to afford—and student loans often come with higher interest rates than mortgages, car loans, and other forms of consumer lending,” said Congressman Courtney. “As higher education becomes more crucial than ever to secure a good-paying job, I applaud Senator Warren for her outstanding leadership on this issue and look forward to working with her to help families afford the dream of college.”

“The burden of student loan debt is a real pocketbook issue for middle-class Americans, and it’s holding back our young people and our economy,” said Senator Franken, a member of the Senate Education Committee. “But right now, there are few options to find relief. You can refinance your home loan, your car loan, and your small business loan. But you can’t refinance your student loan. That’s just plain wrong. Our bill would fix this problem by allowing millions of people in Minnesota and across the country to cut the cost of their loans and keep more of their hard-earned money.”

“Middle class families need a raise and more money in the family checkbook. That means a fair shot at affordable higher education to help them climb the rungs of America’s opportunity ladder,” Senator Mikulski said. “Right now, millions of American students are graduating from college and universities but as they are handed their diplomas, they are being handed a lifetime of debt. Getting a college education is the core of the American dream. I’m fighting to make sure that every student has access to that dream.” 

“Student debt is not only a drag on the American economy, it is tearing at the fabric of the American dream,” Senator Boxer said. “It is outrageous that students can’t refinance at today’s low interest rates. This legislation gives students the same fair shot that other borrowers have when interest rates decline.”

“A college degree is a worthwhile investment, and can be a ticket to the middle class, yet far too many Americans are struggling under the crushing burden of student debt,” said Senator Murray. “This legislation would put more money in borrowers’ pockets by bringing down the costs of the investments they made in their education, which will benefit our economy and help lift the burden of student loans for people in Washington state and across the country.”

“High student loan debt is crippling a generation of Americans. Allowing those with high interest public or private loans to refinance to the same interest rates offered last year is a commonsense solution that will help borrowers get out from the compounding burdens of existing debt and ever-accruing interest,” Senator Wyden said.

“For too many of America’s young people, pursuing a college education has become a one-way ticket to a lifetime of student loan debt,” said Senator Durbin.  “Giving student loan borrowers the option to opt into a lower interest rate by allowing them to refinance their loans will be a financial relief to millions of families in Illinois and America. I am happy to join Senator Warren on this important issue.”

“Congress needs to act to prevent student loan debt from unduly burdening young people and threatening our economic future.  Students and parents who had to take out loans when interest rates were high should be given an opportunity to refinance at a lower rate.  Congress should work on a bipartisan basis to help lift the student debt burden and address the root issues of college affordability.  This legislation is one of many steps I believe Congress should take to enact sensible student loan reform,” said Senator Reed. 

“High interest rates on student loans are creating an anchor around the necks of our young professionals throughout the country as they graduate and enter the workforce, and this legislation will aid those individuals drowning in debt,” said Senator Schumer. “All Americans deserve access to a good education but with skyrocketing student loan debt, plus exorbitant interest rates on top of that, college grads are struggling to make ends meet. Our young men and women deserve a fair shot at an affordable education and this bill will give them some much needed relief.”

"How can we allow Americans buying high-end luxury items to refinance loans after rates drop, but not allow students to refinance their high-rate loans for college?” said Senator Cardin, a member of the Finance Committee. “The federal government should be responsible for ensuring all Americans have a fair shot at success, not be in the business of turning profits off of student loans. This commonsense legislation ensures that at a time of intense global competition we are not pricing American students out of a higher education.”

“Higher education is a pathway to economic opportunity but the burden of excessive student loan debt can prevent college graduates from saving, starting businesses, or buying homes,” Senator Brown said. “Despite the low interest rate environment, many graduates are trapped in high interest rate loans. Ensuring that students and graduates can refinance their loans for more affordable monthly payments will allow them to provide for their families and invest in their communities.”

“Far too many young Americans can’t get ahead today because of the burden of student loan debt,” said Senator Casey. “The Bank on Students Emergency Loan Refinancing Act would help students and recent graduates so they can start saving and working towards their future. This bill could help nearly 1.2 million Pennsylvanians, so I’m calling on Congress to make this legislation a priority.”

“For thousands of Missouri’s young people, staggering student loan debt is strangling the economic opportunities that are supposed to come with a college degree—every dollar paid in interest on that debt, is a dollar not invested in a small business or a new home,” Senator McCaskill said. “I personally benefited from student loans when I was in school, and I’ll continue fighting to make sure that every student who works hard gets a fair shot at an affordable college education.”

“Throughout New Hampshire and across the country people are struggling with the increasing costs of higher education and that’s hurting our students and our economy,” said Senator Shaheen. “Students should be able to refinance their loans just like homeowners can refinance their mortgages. Our plan will help borrowers save thousands on their loans and we ought to act on it on behalf of students who are struggling with crippling debt.” 

“College provides an opportunity for success.  But in Colorado, like much of the rest of the country, student loan debt is an increasing and overwhelming problem,” said Senator Bennet. “We can take steps to make that debt more manageable for students and families.”

“It just doesn't make sense that college graduates can't refinance their student loan debt just like homeowners and businesses already do,” said Senator Gillibrand. “It is clear that student loan debt is dragging down our economy, stopping graduates from buying homes and cars, or delaying the starting of businesses and families. We must strengthen our middle-class families, especially those just starting their careers, instead of forcing them deeper into debt while the federal government profits off their backs." 

“More than 70% of college students who earn a bachelor’s degree graduate with debt – a financial and emotional burden that hurts not only them, but the entire American economy. I am proud to again cosponsor this crucial legislation to ensure graduates are provided relief from inordinate debt. It is abhorrent that the federal government is making $66 billion a year off the backs of students,” said Senator Blumenthal. “We should reward students who invest in their education, not punish them with high interest rates or profit off their backs. As of January 2015, over 511,000 Connecticut residents had outstanding student loans totaling over $12 billion dollars – this legislation will allow students to refinance their loans, and give graduates a fair shot at better lives and brighter futures." 

“The growing cost of college is making it tougher to get a degree, leading more students to a lifetime of debt, not opportunity," Senator Schatz said. “Our legislation would give students the opportunity to refinance their loans at a lower interest and make a college education more affordable and accessible."

“A college education should be a path to prosperity not a path to indebtedness, but student loan debt is holding back an entire generation and creating a drag on economic growth for our country,” said Senator Baldwin. “I am proud to co-sponsor this legislation because it addresses the student loan debt crisis by providing relief to close to half a million Wisconsin borrowers. This crisis demands action and this commonsense legislation will help give students a fair shot at getting ahead and building a stronger future for themselves.” 

"College has been a proven path into the middle class and toward financial security, but today, millions of graduates enter the workforce limited by tens of thousands of dollars in debt,” said Senator Hirono. “For these young people in Hawaii and across the country, high interests rates are a barrier to economic success. Young people shouldn't be forced to pay interest rates of almost 7% for many of these loans, and I look forward to working with my colleagues in the Senate to make college more affordable once more.”

“Our young people who are driven to succeed should not be punished with overwhelming student loans that trap them before their lives as working adults can even begin,” said Senator Heitkamp. “We must address this undue burden by giving our students the tools to refinance their student loans – which helped many of us, myself included, pay for our own college educations. Listening to countless students and parents across North Dakota as they count the number of zeros at the end of their student loans is simply disheartening, and has a draining affect that resonates throughout our economy. That’s why I’m helping introduce legislation that sends a clear message to our young people about our priorities for their future and our economic future: Just as previous generations invested in us, we are investing in you.”

“I am proud to support legislation that would help millions of American families facing overwhelming student loan debt to refinance at the lower interest rates that currently offered to students,” said Senator Markey. “The savings enjoyed by these families through the refinancing of their student loans will help pay for the down payment on a new home, to start a family, or build a new business.  I thank Senator Warren for her leadership on this important issue, and will work with her and all of my Senate colleagues to support greater access to higher education and to make college more affordable.”

"Young people are our greatest national asset and we must invest in their potential," Senator Booker said. "Student loan debt has a crippling effect on our economic recovery and the financial health of recent graduates. If we can refinance car and home loans, we should also refinance school loans. This legislation will give students a fairer shot at achieving the American Dream."

“If you can refinance your mortgage, you should be able to refinance your student loans, and this bill would benefit nearly 1 million graduates across Michigan working to pay off their outstanding student loan debt,” said Senator Peters. “I’m proud to support this commonsense effort to help make sure higher education is a pathway to economic opportunity instead of an overwhelming financial burden for students and families.”